Surely it is more expensive for airlines to operate to the Scottish airports anyway with their more northerly position? Can any APD savings really make it worth while to travel by road or rail to fly from Edinburgh or Glasgow?
I think the point that the transport minister is making is that low-cost airlines would find the prospect of lower APD rates extremely appealing and would locate more resources in Scotland with the likes of NCL seeing less. Initially, the Scottish leadership has said it will reduce APD rates by 50%. It would like to abolish APD entirely but cannot afford to do so yet.
Perhaps £6.50 per sector would not in itself cause passengers to abandon NCL but even this could tempt the likes of Ryanair. If they reduced average fares by £3 they would still make an extra £3.50 per passenger or around £600 on a typical sector.
Long haul would be a much bigger saving including flights via hubs such as AMS.
This week the Institute for Public Policy Research has published a lengthy paper on the likely effects to the Bristol region if Wales gained more devolved fiscal and taxation powers which seems almost guaranteed. At present APD is not amongst the tax raising powers being devolved but if Labour wins the election and relies on the support of SNP and Plaid Cymru to run the UK there seems not much doubt that APD will be included.
Part of the IPPR paper dealt with APD effects and feels that the West Country/South Wales areas are much more closely linked especially physically than Scotland and Northeast England, and that a nil rate in Wales which is what the Wales Assembly proposes would have a significant effect on BRS. It quotes HMRC estimating that BRS could lose 25% of its passenger numbers by 2020.
I don't understand the transport minister's point when he says that EU regulations prevent regional variations in England. Scotland and Wales, not to mention Northern Ireland, are all part of the UK and there will be variable rates in those countries once APD is devolved (there already are in part in Northern Ireland).
This just shows what a mess the politicians have got us into. They were so desperate to prevent Scotland voting for independence that all the parties promised the earth if the country stayed within the UK. They gave little if any thought to the consequences and in so many things following devolution/partial devolution it's England that is suffering, especially the regions.
